On December 24th, real estate trading and service platform Beike Holdings Limited (NYSE: BEKE; 02423. HK) announced the termination of its proposed acquisition of all remaining equity in Space Intelligence.
According to the announcement, on December 23, 2024, after careful consideration of factors such as uncertainty in reaching delivery conditions, and after discussing and reaching an agreement with all parties involved, in accordance with the terms of the relevant equity acquisition agreement, Beike has decided to terminate the equity acquisition agreement between its subsidiary Beike Meijia and Space Smart Decoration (Beijing) Co., Ltd. (referred to as "Space Smart") and all existing shareholders (excluding Beike Meijia itself).
According to the announcement, the proposed acquisition will not proceed and has been terminated. As of the announcement date, Beike has not paid or paid any consideration for the acquisition.
Public information shows that Space Intelligence was founded in 2010 and is a provider of one-stop home decoration services. Its "Love Space" brand service covers 14 cities. From the perspective of equity structure, 7.1092% equity of Space Intelligence is held by Red Love Space; 1.9195% equity is held by Beike Meijia; The remaining 90.9713% equity is held by 18 other entities or individuals.
Beike announced its acquisition on October 11, 2023. At that time, Beike Meijia signed an equity acquisition agreement with Space Intelligence and Red Love Space. Beike Meijia agreed to purchase 7.1092% of Space Intelligence's equity for a cash consideration of $12.67 million. As Red Love Space is wholly owned by a private equity fund managed by Beike's independent non-executive director Chen Xiaohong, it is an affiliate of Beike. The above-mentioned related acquisition is part of the proposed acquisition, aimed at acquiring 98.0805% equity of Space Intelligence that is not beneficially owned by Beike. At that time, Beike Meijia signed an equity acquisition agreement with Space Intelligence and all other existing shareholders (excluding Beike Meijia itself). After the acquisition is completed, Space Intelligence will become its wholly-owned subsidiary, and the transaction price will not exceed approximately RMB 1.55 billion.
However, with the implementation of this announcement, the acquisition was not ultimately achieved. The board of directors of Beike stated in the announcement that the termination is fair and reasonable, in the overall interests of the company and its shareholders, and has no significant adverse impact on the current business operations or financial condition of the group.
According to public information, Beike upgraded its "one body, two wings" strategy in 2021. In July of the same year, Beike announced the acquisition of Shengdu Decoration for 8 billion yuan, entering the home decoration and home furnishing industry; In July 2023, it will be upgraded to the "One Body Three Wings" strategy, where "One Body" refers to the real estate brokerage business, while the "Three Wings" include home decoration, Hui Ju, and Bei Hao Jia.
According to the financial performance released by Beike, its total revenue in the third quarter of this year was 22.6 billion yuan, an increase of 26.8% year-on-year; The gross profit margin is 22.7%; Net profit was 1.168 billion yuan, basically unchanged year-on-year; The adjusted net profit is 1.782 billion yuan.
According to data released by Beike, the net revenue of Beike's existing housing business in the third quarter was 6.2 billion yuan, which is basically the same as the same period in 2023; The net revenue of the new house business was 5.9 billion yuan, an increase of 30.9% year-on-year; The net income of home decoration and furnishings increased by 32.6% year-on-year to 4.2 billion yuan; The net income from emerging businesses and others was 500 million yuan, basically unchanged year-on-year.
As of September 30, 2024, Beike had 46857 active stores, an increase of 14.6% compared to the same period last year; The number of active brokers was 423400, an increase of 6.1% compared to the same period last year; The number of monthly active mobile users is 46.2 million, compared to 49.2 million in the same period of 2023.
As of September 30, 2024, Beike's total balance of cash, cash equivalents, restricted funds, and short-term investments was RMB 59.5 billion.
As of press time, Beike Hong Kong stocks were reported at HKD 47.45 per share, with a slight increase of 0.21%; The closing price of Beike US stock rose slightly by 0.16% to $18.41.